Some thoughts on Sybase, following on from its recent Analyst Summit in the New York Stock Exchange
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Also posted on: The Norfolk Punt
So this is the Sybase Analyst Summit, and the big question for many people, I suppose, is when is it going to be branded SAP and why? Well, I think it’s probably going to remain Sybase but for those that haven’t noticed, SAP has announced its intention to buy Sybase (at rather a good price from Sybases’s POV: $5.8 billion). Neither party can talk much about details of course (and the regulators may still have something to say) but John Chen (chairman, chief executive officer and president of Sybase, Inc. since 1998) seems quite happy with the deal.
And both SAP and Sybase appear to think that the two companies will continue more-or-less independent paths under one owner, for the foreseeable future, at least. When you look at the relationship of the two companies there is very little overlap, some strong synergies—and SAP has an excellent position in the marketplace and a very strong sales force, which Sybase can exploit; and Sybase has a very strong technology leadership position (especially in mobile) which SAP could use.
I explored some of the synergies with Billy Ho (Sybase SVP and GM, Product and Technology Operations). Sybase is a strong engineering product company, he says, but once people have bought the product they often need to understand how to deploy and customise the product—how to use it as part of delivering a holistic business outcome. That’s a professional services story that SAP can tell. Then again, SAP has a very strong position in its market but it has (in my opinion at least) somewhat old and clunky technology and SAP really needs to be seen as innovative and excellent in at least one area. The Sybase mobility platform gives this to SAP—next generation mobile computing, SAP on the Apple iPad (Ho, of course, already has an iPad). And, the synergy between Business Objects and Sybase IQ is obvious. Possibly, SAP saw itself as becoming rather dependent on Sybase technology and decided to buy the company while it could still afford to.
Now, even leaving aside the SAP issue, the Sybase Mobility Platform seems to be where Sybase sees its future. Nevertheless, this doesn’t mean that it is abandoning its fundamental data management platform. Sybase ASE is still important and Sybase IQ is still sexy. The latest ASE v15.5 comes with an in-memory database which, Ho claims, is more effective than competing products because it is designed from the ground up as a database (with the ACID property) rather than as an extension of cache technology. Sybase also has a strong offering in Complex Event Processing (CEP) following its acquisition of Aleri.
Sybase’s existing development tools are still around, I’m glad to say, although they seem to have rather a low public profile at the moment. Sales of PowerDesigner, say, as a standalone product are probably falling although Dr. Raj Nathan (Executive VP & Chief Marketing Officer, Worldwide Marketing and Business Solutions Operations, Sybase, Inc.) assures me that it, like all of Sybase’s legacy products, is still making a profit. Nevertheless, it is increasingly being embedded as a fundamental part of other products as well as being sold stand-alone. These days, you need a “systems of systems” modelling capability in order to deliver the right business outcomes to the business. Businesses are realising that they are dependent on software (in the broadest sense) and that “building the system right” doesn’t matter a penny damn if you’re not also “building the right system” for the business.
However, as I said, Mobility is Sybase’s lead focus these days, and it seems to be banking on the view of Geoffrey Moore (of Crossing the Chasm fame and employed by Sybase as a visionary) that we are at an inflection point, where the Enterprise begins to pick up on the mobility and mobile phone revolution experienced in the consumer space over the last 10 years. Sybase is looking for, it seems to me, the sort of explosive acceptance for mCommerce (especially in emerging markets without legacy baggage) that Apple generated for the iPhone and will probably repeat with the iPad (it is interesting that Apple overtaking Microsoft in market cap seems to particularly interest Ho just now).
Will it get it this explosive acceptance? Very possibly, as there are already some very innovative mobile applications around money transfer for the un- or under-banked using the Sybase Mobility Platform, for example. There is significant likelihood of explosive growth in such applications as emerging economies grow, without the “benefit” (or barrier) of an existing banking infrastructure. And remember that Sybase’s view of “mobile payments” is focussed on cash transactions for physical goods—not ringtone sales and the like and not credit provision. This does remove some possible issues.
Nevertheless, there may still be some interesting issues ahead. These may well be different in the developing and developed world, largely because of the absence or presence of existing banking infrastructures and cultures, although everybody assures me that the regulatory issues are all addressed. This is because mCommerce and mPayments activity eventually hits a bank account and bank accounts are all properly regulated—aren’t they? Yes, of course they are.
My concerns are more a matter of focus than anything. I think that Sybases’s mobile mCommerce platform is entering the world of holistic services, not just technology; and is taking people past an “inflection point” so current processeses, attitudes and cultures may have to cope with a new environment, which brings current assumptions into question. It is interesting—and very good—that Sybase has an active business consultancy team which can help customers design proceses and controls for an environment that is very new to some of them. It also includes sample applications and templates with its platform, which can exemplify and encourage good practice.
Accessibility still concerns me a bit, in a very wide sense. My wife works with people who get into debt because they can’t manage credit cards and often can’t cope with anything much more complicated than a cheque account, sometimes not even that. How well will they cope with mobile phone banking and payments, which may become the fashionable status quo, encouraged by banks (because it is so much cheaper than the alternatives), although the mobile channel is unlikely to ever comletely replace conventional channels.
Will it be too easy to make payments people can’t afford? Too hard to keep PINs etc. away from dysfunctional family members? Or will real time feedback of account balances and usage patterns encourage people to behave more responsibly with their money? Unfortunately, if Moore is right and we are at an inflection point, it is really, really difficult to see exactly what is coming next.
Prediction past inflection points is always risky although, Diarmuid Mallon (Senior Product Marketing Manager, Sybase 365 Mobile Services) suggests that we can predict past the EMEA inflection point by looking at mobile in Asia; and past the USA inflection by looking at EMEA. But where Asia is going next, who knows…. and I suppose that one might say the same about Sybase/SAP, although I for one will be surprised if Sybase changes much in the near or medium term future (as long as SAP suddenly doesn’t try to merge the companies’ different cultures too aggressively).